THE TOBACCO BOARD ACT, 1975 

_________ 

ARRANGEMENT OF SECTIONS 

__________ 

CHAPTER I 

PRELIMINARY 

SECTIONS 

1. Short title, extent and commencement. 

2. Declaration as to expediency of control by the Union. 

3. Definitions. 

CHAPTER II 

THE TOBACCO BOARD 

4. Establishment and constitution of the Board. 

5. Salary and allowances and other conditions of service of Chairman. 

6. Officers of the Board and other staff. 

7. Committees of the Board. 

8. Functions of the Board. 

9. Dissolution of the Board. 

CHAPTER III 

REGULATION OF PRODUCTION AND DISPOSAL OF VIRGINIA TOBACCO 

10. Registration of growers of virginia tobacco. 

10A. Registration of growers of virginia tobacco seedlings for commercial purposes. 

11. Registration of curers of virginia tobacco. 

11A. Registration of processors and manufacturers of virginia tobacco, etc. 

11B. Licences to be obtained for grading work and construction of barns, etc. 

12. Registration of exporters, packers, auctioneers and dealers. 

13. Virginia tobacco to be sold at registered auction platforms 

13A. Duty of registered dealers and exporters to purchase at auction platforms, etc. 

13B. Duty or buyers of virginia tobacco at places other than auction platforms to refrain from certain 

unfair practices. 

14. Application, cancellation, fees and other matters relating to registration. 

14A. Power to levy fees. 

15. Power of inspection. 

CHAPTER IV 

FINANCE, ACCOUNTS AND AUDIT 

16. Grants and loans by the Central Government. 

17. Constitution of the Tobacco Fund. 

18. Borrowing powers of the Board. 

18A. Writing off of losses. 

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SECTIONS 

19. Accounts and audit. 

CHAPTER V 

CONTROL BY CENTRAL GOVERNMENT 

20. Power to prohibit or control import and export of tobacco and tobacco products. 

20A. Power of Central Government to authorise purchase of virginia tobacco. 

21. Directions by Central Government. 

22. Returns and reports. 

CHAPTER VI 

MISCELLANEOUS 

23. Penalties. 

24. Penalties for obstructing a member, officer or other employee of the Board in the discharge of his 

duties and for failure to produce books and records. 

25. Other penalties. 

26. Offences by companies. 

27. Jurisdiction of court. 

28. Previous sanction of Central Government. 

29. Protection of action taken in good faith. 

30. Suspension of operation of Act. 

31. Application of other laws not barred. 

32. Power of Central Government to make rules. 

33. Power to make regulations.

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THE TOBACCO BOARD ACT, 1975 

ACT NO. 4 OF 1975 

An Act to provide for the development under the control of the Union of the tobacco industry. 

BE it enacted by Parliament in the Twenty-sixth Year of the Republic of India as follows:— 

[19th March, 1975.] 

CHAPTER I 

PRELIMINARY 

1.  Short  title,  extent  and  commencement.—(1)  This  Act  may  be  called  the  Tobacco  Board          

Act, 1975. 

(2) It extends to the whole of India. 
(3)  It  shall  come  into  force  on  such  date1  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint: 

Provided that different dates may be appointed for different provisions of this Act and for different 

States or different parts thereof. 

2. Declaration as to expediency of control by the Union.—It is hereby declared that it is expedient 

in the public interest that the Union should take under its control the tobacco industry. 

3. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “Board” means the Tobacco Board established under section 4; 

(b) “Chairman” means Chairman of the Board; 

(c)  “curing”  shall  have  the  meaning  assigned  to  it  in  the  Central  Excises  and  Salt  Act,                          

1944  (1  of  1944)  and  all  its  grammatical  variations  and  cognate  expressions  shall  be  construed 
accordingly; 

(d) “dealer” means a dealer in tobacco; 

(e) “Executive Director” means the Executive Director appointed under section 6; 

(f) “export” and “import” mean, respectively, taking out of, or bringing into, India, by land, sea or 

air; 

(g) “member” means a member of the Board and includes the Chairman; 

(h) “prescribed” means prescribed by rules made under this Act; 

(i) “registered” means, except in the expression “registered grower”, registered under Chapter III 

of this Act and the rules made thereunder; 

(j)  “registered  grower”  means  a  person  who  has  obtained  a  certificate  of  registration  under   

section 10 for growing virginia tobacco. 

CHAPTER II 

THE TOBACCO BOARD 

4.  Establishment  and  constitution  of  the  Board.—(1)  With  effect  from  such  date  as  the  Central 
Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established 
for the purposes of this Act, a Board to be called the Tobacco Board. 

1. 28th August, 1976, vide notification No. S.O. 3141, dated 20th August, 1976, see Gazette of India, Extraordinary, Part II, 
sec. 3(ii). 
This Act has been extended to the States of Andhra Pradesh and Karnataka in respect of ss. 10 and 11 and ss. 12, 14 and 15 
in the whole of India. 

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(2) The  Board shall  be  a  body  corporate  by  the name  aforesaid,  having  perpetual  succession and  a 
common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to 
contract, and shall by the said name sue and be sued. 

1[(3) The head office of the Board shall be at Guntur in the State of Andhra Pradesh and the Board 
may, with the previous approval of the Central Government, establish offices or agencies at other places 
in or outside India.] 

(4) The Board shall consist of the following members, namely:— 

(a) a Chairman to be appointed by the Central Government; 

(b) three members of Parliament, of whom two shall be elected by the House of the People and 

one by the Council of States; 

(c) 2[eight] members to be appointed by the Central Government to represent respectively:— 

(i) the Ministry of the Central Government dealing with Agriculture; 

(ii) the Ministry of the Central Government dealing with Commerce; 

(iii) the Ministry of the Central Government dealing with Finance; 

(iv) the Ministry of the Central Government dealing with Industrial Development; 

(v) the Indian Council of Agricultural Research; 
(vi) the Government of Andhra Pradesh; 3*** 
4[(via) the Government of Gujarat; and] 

(vii) the Government of Karnataka; 

(d)  two  members  to  be  appointed  by  the  Central  Government,  by  rotation  in  the  alphabetical 
order,  to  represent  the  Governments  of  tobacco-growing  States  5[other  than  the  States  of  Andhra 
Pradesh, Gujarat and Karnataka]; 

(e)  not  more  than  6[ten  members]  to  be  appointed  by  the  Central  Government  from  amongst 
growers  of  tobacco,  dealers  and  exporters  (including  packers)  of  tobacco  and  tobacco  products, 
manufacturers  of  tobacco  products  and  from  amongst  persons  who,  in  the  opinion  of  the  Central 
Government, are experts in tobacco marketing or agricultural economics: 

7[Provided that the number of members appointed under this clause from amongst the growers of 

tobacco shall not exceed six.] 

7[(f)  the  Agricultural  Marketing  Adviser  to  the  Government  of  India,  Department  of  Rural 

Development, ex officio; 

(g) the Executive Director, ex officio.] 

7[(4A) It is hereby declared that the office of member of the Board shall not disqualify its holder for 

being chosen as, or for being, a member of either House of Parliament.] 

(5) The Board shall elect, from amongst its members, a Vice-Chairman who shall exercise such of the 
powers and perform such of the functions of the Chairman as may be prescribed or as may be delegated to 
him by the Chairman. 

(6) The term of office of the members and the manner of filling vacancies among, and the procedure 

to be followed in the discharge of their functions by, the members shall be such as may be prescribed. 

1. Subs. by Act 36 of 1978, s. 2, for sub-section (3) (w.e.f. 30-8-1978). 
2. Subs. by s. 2, ibid., for “seven” (w.e.f. 30-8-1978).  
3. The word “and” omitted by s. 2, ibid. (w.e.f. 30-8-1978). 
4. Ins. by s. 2, ibid. (w.e.f. 30-8-1978). 
5. Subs. by s. 2, ibid., for “other than the States of Andhra Pradesh and Karnataka” (w.e.f. 30-8-1978).  
6. Subs. by Act 57 of 1985, s. 2, for “eight members” (w.e.f. 1-12-1985).   
7. Ins. by s. 2, ibid. (w.e.f. 1-12-1985).  

4 

                                                           
(7) 1[Any officer] of the Central Government (not being a member of the Board) as is deputed by the 
Central Government in this behalf, shall have the right to attend the meetings of the Board and take part 
in the proceedings thereof, but shall not have the right to vote. 

(8) The Board may associate with itself, in such manner and for such purposes as may be prescribed, 
any persons whose assistance or advice it may desire in complying with any of the provisions of this Act 
and a person so associated shall have the right to take part in the discussions of the Board relevant to the 
purposes for which he has been associated, but shall not have the right to vote. 

(9)  No  act  or  proceeding  of  the  Board  or  any  committee  appointed  by  it  under  section  7  shall  be 

invalidated merely by reason of— 

(a) any vacancy in, or any defect in the constitution of, the Board or such committee; or 

(b) any defect in the appointment of a person acting as a member of the Board or such committee; 

or 

(c) any irregularity in the procedure of the Board or such committee not affecting the merits of 

the case. 

5. Salary and allowances and other conditions of service of Chairman.—The Chairman shall be 
entitled  to  such  salary  and  allowances  and  such  conditions  of  service  in  respect  of  leave,  pension, 
provident fund and other matters as may, from time to time, be fixed by the Central Government. 

6. Officers of the Board and other staff.—(1) The Central Government shall appoint an Executive 
Director to exercise such powers and perform such duties under the Chairman as may be prescribed or as 
may be delegated to him by the Chairman. 

(2)  The  Central  Government  shall  appoint  a  Secretary  to  the  Board  to  exercise  such  powers  and 
perform  such  duties  under  the  Chairman  as  may  be  prescribed  or  as  may  be  delegated  to  him  by  the 
Chairman. 

(3)  The  Executive  Director  and  the  Secretary  shall  be  entitled  to  such  salaries  and  allowances  and 
such conditions of service in respect of leave, pension, provident fund and other matters as may from time 
to time be fixed by the Central Government. 

(4) Subject to such control, restrictions and conditions (including conditions as to appointment of the 
officers and other employees of the Tobacco Export Promotion Council, in the event of the said Council 
being wound up) as may be prescribed, the Board may appoint such other officers and employees as may 
be necessary for the efficient performance of its functions. 

(5)  The  Chairman,  the  Executive  Director,  the  Secretary  and  other  officers  and  employees  of  the 
Board  shall  not  undertake  any  work  unconnected  with  their  duties  under  this  Act  except  with  the 
permission of the Central Government. 

7. Committees of the Board.—(1) The Board may appoint such committees as may be necessary for 

the efficient discharge of its duties and performance of its functions under this Act. 

(2)  The  Board  shall  have  the  power  to  co-opt  as  members  of  any  committee  appointed  under                    

sub-section  (1)  such  number  of  persons  who  are  not members  of  the  Board  as  it  may  think  fit  and  the 
persons  so  co-opted  shall  have  the  right  to  attend  the  meetings  of  the  committee  and  take  part  in  the 
proceedings of the committee but shall not have the right to vote. 

8. Functions of the Board.—(1) It shall be the duty of the Board to promote, by such measures as it 

thinks fit, the development under the control of the Central Government of the tobacco industry. 

(2) Without prejudice to the generality of the provisions of sub-section (1), the measures referred to 

therein may provide for— 

2[(a)  regulating  the  production  and  curing  of  virginia  tobacco  having  regard  to  the  following 

factors, namely:— 

(i) the demand for virginia tobacco in India and abroad; 

1. Subs. byAct 57 of 1985, s. 2, for “The Executive Director and any such officer” (w.e.f. 1-12-1985).  
2. Subs. by s. 3, ibid., for clause (a) (w.e.f. 1-12-1985).  

5 

                                                           
(ii) the suitability of land for growing virginia tobacco; 

(iii) the differences in soil characteristics and agro-climatic factors in different regions of the 
country  where  virginia  tobacco  is  grown  and  the  effect  thereof  on  the  quality  and  quantity  of 
virginia tobacco produced in those regions; 

(iv) the marketability of different types of virginia tobacco; 

(v) the need for rotation of crops; and 

(vi) the nature of the holdings of the growers of virginia tobacco whether owned or leased;] 

(b)  keeping  a  constant  watch  on  the  virginia  tobacco  market,  both  in  India  and  abroad,  and 
ensuring that the growers get a fair and remunerative price  for the same and that there are no wide 
fluctuations in the prices of the commodity; 

(c) maintenance and improvement of existing markets, and development of new markets outside 
India for Indian virginia tobacco and its products and devising of marketing strategy in consonance 
with demand for the commodity outside India, including group marketing under limited brand names; 

1[(cc) establishment by the Board of auction platforms, with the previous approval of the Central 
Government, for the sale of virginia tobacco by registered growers or curers, and functioning of the 
Board  as  an  auctioneer  at  auction  platforms  established  by  or  registered  with  it  subject  to  such 
conditions as may be specified by the Central Government;] 

(d) recommending to Central Government the minimum prices which may be fixed for purposes 

of export of virginia tobacco with a view to avoiding unhealthy competition amongst the exporters; 

(e) regulating in other respects virginia tobacco marketing in India and export of virginia tobacco 

having due regard to the interests of growers, manufacturers and dealers and the nation; 

(f)  propagating  information  useful  to  the  growers,  dealers  and  exporters  (including  packers)  of 
virginia tobacco and manufacturers of virginia tobacco products and others concerned with virginia 
tobacco and products thereof; 

(g) purchasing virginia tobacco from growers when the same is considered necessary or expedient 
for protecting the interests of the growers and disposal of the same in India or abroad as and when 
considered appropriate; 

(h) promoting the grading of tobacco at the level of growers; 

(i)  sponsoring,  assisting,  co-ordinating  or  encouraging  scientific,  technological  and  economic 

research for the promotion of tobacco industry; 

(j) such other matters as may be prescribed. 

(3)  Without  prejudice  to  the  generality  of  the  provisions  of  sub-section  (1)  and  subject  to  priority 
being given to matters specified in sub-section (2), the measures referred to in sub-section (1) may also 
provide  in  relation  to  tobacco,  other  than  virginia  tobacco,  for  all  or  any  of  the  matters  specified  in  
clauses (c) to (g) of sub-section (2) and for this purpose any reference in those clauses to virginia tobacco 
shall be construed as including a reference to tobacco other than virginia tobacco. 

(4) The Board shall perform its functions under this section in accordance with and subject to such 
rules as may be made by the Central Government and such rules may in particular make provisions for 
ensuring  that  the  Board  functions  in  close  liaison  with  Union  agencies,  institutions  and  authorities 
concerned with the tobacco industry (including growing of tobacco) and avoids duplication of effort. 

9.  Dissolution  of  the  Board.—(1)  The  Central  Government  may,  by  notification  in  the  Official 
Gazette and for reasons to be specified therein, direct that the Board shall be dissolved from such date and 
for such period as may be specified in the notification: 

1. Ins. by Act 36 of 1978, s. 3 (w.e.f. 30-8-1978).  

6 

                                                           
Provided  that  before  issuing  any  such  notification,  the  Central  Government  shall  give  a  reasonable 
opportunity to the Board to make representations against the proposed dissolution and shall consider the 
representations, if any, of the Board. 

(2) When the Board is dissolved under the provisions of sub-section (1),— 

(a) all members, notwithstanding that their term of office has not expired, shall, from the date of 

dissolution, vacate their offices as such members; 

(b) all  powers and  duties of  the  Board shall,  during  the  period  of  dissolution, be  exercised  and 

performed by such person or persons as the Central Government may appoint in this behalf; 

(c) all funds and other properties vested in the Board shall, during the period of dissolution, vest 

in the Central Government; and 

(d)  as  soon  as  the  period  of  dissolution  expires,  the Board  shall  be  reconstituted  in  accordance 

with the provisions of this Act. 

REGULATION OF PRODUCTION AND DISPOSAL OF VIRGINIA TOBACCO 

CHAPTER III 

10. Registration of growers of virginia tobacco.—(1) No person shall grow virginia tobacco except 
under, and in accordance with, the conditions of a certificate of registration obtained from the Board in 
accordance with the rules made under this Act. 

(2) In granting or refusing a certificate of registration, the Board shall have regard to the demand for 
virginia tobacco in India and abroad, and the suitability of the land in relation to which the certificate is 
applied for and such other factors as may, having regard to the needs of the virginia tobacco industry, be 
prescribed. 

(3) A certificate of registration granted in pursuance of this section shall be valid for such period as 

may be prescribed. 

(4)  Every  application  for  such  certificate  of  registration  shall  be  accompanied  by  such  fees  (not 
exceeding one rupee for 0.4 hectare of the land in relation to which such application has been made) as 
may be prescribed. 

1[10A. Registration of growers of virginia tobacco seedlings for commercial purposes.—(1) No 
person  shall  grow  virginia  tobacco  seedlings  for  commercial  purposes  unless  he  registers  himself  as  a 
nursery grower with the Board in accordance with the rules made under this Act. 

Explanation.—For the removal of doubts, it is hereby declared that nothing in this sub-section shall 

apply to the growing by a registered grower of any virginia tobacco seedlings for his own use. 

(2) No registered nursery grower shall sell or cause to be sold any virginia tobacco seedlings grown 

by him to any person other than a registered grower.] 

11. Registration of curers of virginia tobacco.—No person other than a registered curer shall cure 
or  undertake  the  curing  of  virginia  tobacco  unless  he  registers  himself  as  a  curer  with  the  Board  in 
accordance with the rules made under this Act. 

2[11A. Registration of processors and manufacturers of virginia tobacco, etc.—No person shall 
process virginia tobacco or manufacture products therefrom unless he registers himself as such processor 
or manufacturer, as the case may be with the Board in accordance with the rules made under this Act. 

11B.  Licences  to  be  obtained  for  grading  work  and  construction  of  barns  etc.—No  person 

shall— 

(i) take up grading work relating to virginia tobacco for commercial purposes; or 

(ii) take up the construction and operation of a barn, 

unless he obtains a licence from the Board in accordance with the rules made under this Act. 

1. Ins. by Act 57 of 1985, s. 4 (w.e.f. 1-12-1985).  
2. Ins. by s. 5, ibid. (w.e.f. 1-12-1985).  

7 

                                                           
Explanation.—For the purposes of this section,— 

(i)  “barn”  means  a  building  or  structure  with  a  roof  of  zinc  sheets  or  tiles  having  flue  pipes, 

furnace and tiers used for flue curing of tobacco leaves; 

(ii)  “grading  work”  means  separating  tobacco  leaves  into  specific  grades  on  the  basis  of  plant 
position,  maturity,  colour, body  and  blemish  and in  accordance  with such specifications  as  may  be 
prescribed.] 

12. Registration of exporters, packers, auctioneers and dealers.—No person shall export tobacco 
or any tobacco products or function as a packer, auctioneer of, or dealer in, tobacco unless he registers 
himself with the Board in accordance with the rules made under this Act. 

13.  Virginia tobacco  to  be  sold  at  registered  auction  platforms.—No  registered  grower  or  curer 
shall sell or cause to be sold virginia tobacco elsewhere than at an auction platform registered with the 
Board in accordance with the rules made under this Act 1[or established by the Board under this Act]. 

2[13A.  Duty  of  registered  dealers  and  exporters  to  purchase  at  auction  platforms,  etc.—No 
registered  dealer  or  registered  exporter  shall  purchase  or  cause  to  be  purchased  virginia  tobacco 
elsewhere— 

(a) than at an auction platform registered with the Board in accordance with the rules made under 

this Act or established by the Board under this Act; or 

(b) than from any other registered dealer or a registered grower or curer: 

Provided  that  in  relation  to  any  State  in  which  the  provisions  of  section  13  are  not  in  force,  the 

condition specified under clause (a) shall not apply. 

13B. Duty of buyers of virginia tobacco at places other than auction platforms to refrain from 
certain  unfair  practices.—Every  dealer  who  purchases  virginia  tobacco  in  any  State  in  which  the 
provisions of section 13 are not in force,— 

(a) shall pay the full price for the whole quantity of virginia tobacco so purchased by him at the 
rate at which he agreed to purchase such tobacco and shall refrain from claiming any discount in the 
weight  or  other  deductions  in  weight  thereof  or  any  deductions  from  the  price  as  calculated  in 
accordance with such rate; 

(b) shall pay the full price for virginia tobacco so purchased by him as calculated in  accordance 
with the provisions of clause (a) as expeditiously as possible and in any case within such reasonable 
time as may be specified in this behalf by the Board; and 

(c) shall refrain from having recourse to any practices which the Board may, having regard to the 
need  for  protection  of  persons  selling  virginia  tobacco  in  such  State  and  all  other  relevant 
considerations, specify to be unfair practices.] 

14.  Application,  cancellation,  fees  and  other  matters  relating  to  registration.—The  form  of 
application  and  the  form  of  certificate  of  registration  under  section  10,  the  form  of  application  3[for 
registration of nursery growers for the purposes of section 10A, for registration of curers for the purposes 
of  section  11,  for  registration  of  processors  and  manufacturers  for  the  purposes  of  section  11A,  for 
obtaining licences for taking up grading work or construction and operation of barns under section 11B], 
for  registration  of  exporters,  packers  or  auctioneers  of,  or  dealers  in,  tobacco,  for  the  purposes  of               
section 12, and for registration of auction platforms for the purposes of section 13, the time within which 
and  the  manner  in  which  such  applications  shall  be  made,  the  fees  payable  on  such  applications,  the 
particulars  to  be  specified  therein,  the  principles  and  the  procedure  to  be  followed  in  granting  and 
cancelling certificates of registration or the registration of auction platforms or, as the case may be,  4[the 
registration  as  nursery  growers,  curers,  processors,  exporters,  packers  or  auctioneers  of,  or  dealers  in, 

1. Ins. by Act 36 of 1978, s. 4 (w.e.f. 30-8-1978). 
2. Ins. by Act 57 of 1985, s. 6 (w.e.f. 1-12-1985). 
3. Subs. by s. 7, ibid., for “for registration of curers for the purposes of section 11” (w.e.f. 1-12-1985).  
4. Subs. by s. 7, ibid., for certain words (w.e.f. 1-12-1985). 

8 

                                                           
virginia  tobacco  or  as  manufacturers  of  the  products  of  virginia  tobacco  or  in  granting  licences  under 
section 11B, the returns to be submitted and the registers to be maintained by registered growers, nursery 
growers,  curers,  processors,  exporters,  packers  or  auctioneers  of,  or  dealers  in,  virginia  tobacco  or  the 
registered  manufacturers  of  the  products  of  virginia  tobacco  or  the  persons  licensed  under  section  11B 
and the registers to be kept by the Board shall be such as may be prescribed]. 

1[14A. Power to levy fees.—(1) Where virginia tobacco is sold at any auction platform established by 
the Board under this Act, it shall be competent for the Board or for any officer of the Board authorised by 
it in this behalf to levy fees, for the services rendered by the Board in relation to such sale, at such rate not 
exceeding two per cent. of the value of such tobacco as the Central Government may, from time to time, 
by notification in the Official Gazette, specify. 

(2) The fees levied under sub-section (1) shall be collected by the Board or such officer, equally from 
the  seller  of  the  virginia  tobacco  and  the  purchaser  of  such  tobacco,  in  such  manner  as  may  be 
prescribed.] 

15. Power of inspection.—The Board may authorise any of its members, officers or other employees 
to  inspect  in  such  manner  as  may  be  prescribed  any  land  or  premises  to  verify  the  accuracy  of  any 
particulars mentioned in any application or any return referred to in section 14. 

CHAPTER IV 

FINANCE, ACCOUNTS AND AUDIT 

16.  Grants  and  loans  by  the  Central  Government.—The  Central  Government  may,  after  due 
appropriation made by Parliament by law in this behalf, pay to the Board by way of grants or loans such 
sums of money as the Central Government may think fit for being utilised for the purposes of this Act. 

17. Constitution of the Tobacco Fund.—(1) There shall be formed a Fund to be called the Tobacco 

Fund and there shall be credited thereto— 

(a) the fees levied and collected under this Act or the rules made thereunder; 

(b) any sums of money paid or any loans granted by the Central Government for the purposes of 

this Act; 

(c) any grants or loans that may be made by any person for the purposes of this Act; 

(d) the sums, if any, realised by the Board in carrying out the measures referred to in section 8. 

(2) The Fund shall be applied— 

(a) for meeting the cost of the measures referred to in section 8; 

(b)  for  meeting  the  salaries,  allowances  and  other  remuneration  of  the  officers  and  other 

employees of the Board; 

(c) for meeting the other administrative expenses of the Board; 

(d) for repayment of any loans. 

18.  Borrowing  powers  of  the  Board.—Subject  to  such  rules  as  may  be  made  in  this  behalf,  the 
Board shall have the power to borrow on the security of the Tobacco Fund or any other asset for carrying 
out the purposes of this Act. 

2[18A.  Writing  off  of  losses.—Subject  to  such  conditions  as  may  be  specified  by  the  Central 
Government, where the Board is of opinion that any amount due to, or any loss, whether of money or of 
property,  incurred  by,  the  Board  is  irrecoverable,  the  Board  may,  with  the  previous  approval  of  the 
Central Government, sanction the writing off finally of the said amount or loss: 

Provided  that  no  such  approval  of  the  Central  Government  shall  be  necessary  where  such 
irrecoverable amount or loss does not exceed in any individual case and in the aggregate in any year such 
amounts as may be prescribed.] 

1. Ins. by Act 36 of 1978, s. 5 (w.e.f. 30-8-1978).  
2. Ins. by Act 57 of 1985, s. 8 (w.e.f. 1-12-1985).  

9 

                                                           
19. Accounts and audit.—(1) The Board shall maintain proper accounts and other relevant records 
and  prepare  an  annual  statement  of  accounts,  including  the  1[income  and  expenditure  account]  and  the 
balance-sheet  in  such  form  as  may  be  prescribed  by  the  Central  Government  in  consultation  with  the 
Comptroller and Auditor-General of India. 

(2) The accounts of the  Board shall be audited by the Comptroller and Auditor-General of India at 
such  intervals  as  may  be  specified  by  him  and  any  expenditure  incurred  in  connection  with  such  audit 
shall be payable by the Board to the Comptroller and Auditor-General. 

(3)  The  Comptroller  and  Auditor-General  of  India  and  any  person  appointed  by  him  in  connection 
with  the  audit  of  the  accounts  of  the  Board  shall  have  the  same  rights  and  privileges  and  authority  in 
connection with such audit as the Comptroller and Auditor-General has in connection with the audit of 
Government accounts and, in particular, shall have the right to demand the production of books, accounts, 
connected vouchers and other documents and papers and to inspect any of the offices of the Board. 

(4) The accounts  of the  Board as  certified  by  the  Comptroller and  Auditor-General  of  India  or  any 
other  person  appointed  by  him  in  this  behalf  together  with  the  audit  report  thereon  shall  be  forwarded 
annually  to  the  Central  Government  and  that  Government  shall  cause  the  same  to  be  laid  before  each 
House of Parliament. 

CHAPTER V 

CONTROL BY CENTRAL GOVERNMENT 

20. Power to prohibit or control import and export of tobacco and tobacco products.—(1) The 
Central  Government  may,  by  order  published  in  the  Official  Gazette,  make  provision  for  prohibiting, 
restricting or otherwise controlling the import or export of tobacco and tobacco products, either generally 
or in specified classes of cases. 

(2)  All  tobacco  and  tobacco  products  to  which  any  order  under  sub-section  (1)  applies,  shall  be 
deemed to be goods of which the import or export has been prohibited under section 11 of the Customs 
Act, 1962 (52 of 1962), and all the provisions of that Act shall have effect accordingly. 

(3)  If  any  person  contravenes  any  order  made  under  sub-section  (1),  he  shall,  without  prejudice  to  
any  confiscation  or  penalty  to  which  he  may  be  liable  under  the  provisions  of  the  Customs  Act,           
1962 (52 of 1962), as applied by sub-section (2), be punishable with imprisonment for a term which may 
extend to one year, or with fine, or with both. 

2[20A.  Power  of  Central  Government  to  authorise  purchase  of  virginia  tobacco.—Without 
prejudice  to  the  provisions  of  clause  (g)  of  sub-section  (2)  of  section  8  and  notwithstanding  anything 
contained in any other provision of this Act, if the Central Government is satisfied that it is necessary or 
expedient so to do, it may, by order in writing and subject to such conditions and limitations as may be 
specified in the order, authorise any body or other agency to purchase virginia tobacco from the growers 
and dispose of the same in India or abroad.] 

21.  Directions  by  Central  Government.—The  Board  shall  carry  out  such  directions  as  may  be 

issued to it from time to time by the Central Government for the efficient administration of this Act. 

22. Returns and reports.—(1) The Board shall furnish to the Central Government at such time and 
in such form and manner as may be prescribed or as the Central Government may direct, such returns and 
statements and such particulars in regard to any proposed or existing programme for the promotion and 
development of the tobacco industry, as the Central Government may, from time to time, require. 

(2) Without prejudice to the provisions of sub-section (1), the Board shall, as soon as possible, after 
the end of each financial year, submit to the Central Government a report in such form and before such 
date, as may be prescribed, giving a true and full account of its activities, policy and programmes during 
the previous financial year. 

1. Subs. by Act 57 of 1985, s. 9, for “profit and loss account” (w.e.f. 1-12-1985).  
2. Ins. by s. 10, ibid. (w.e.f. 1-12-1985).  

10 

                                                           
(3)  A  copy  of  the  report  received  under  sub-section  (2)  shall  be  laid,  as  soon  as  may  be  after  it  is 

received, before each House of Parliament. 

CHAPTER VI 

MISCELLANEOUS 

23. Penalties.—Any person who, being required under this Act to furnish any return, fails to furnish 
such return or furnishes a return containing any particular which is false and which he knows to be false 
or does not believe to be true, shall be punishable with fine which may extend to five hundred rupees. 

24. Penalties for obstructing a member, officer or other employee of the Board in the discharge 

of his duties and for failure to produce books and records.—Any person who— 

(a) obstructs any member or any officer or other employee of the Board or any other person in the 
exercise of any power conferred, or in the discharge of any duty imposed, on him by or under this 
Act; or 

(b)  having  control  over  or  custody  of  any  account  book  or  other  record,  fails  to  produce  such 

book or record when required to do so by or under this Act, 

shall be punishable with  imprisonment for a term which may extend to six months, or with fine which 
may extend to one thousand rupees, or with both. 

25. Other penalties.—Whoever contravenes or attempts to contravene or abets the contravention of 
the  provisions  of  this  Act  1[or  of  any  rules  or  regulations  made  thereunder]  other  than  the  provisions, 
punishment for the contravention whereof has been provided for in section 20 or section 23 or section 24, 
shall be punishable with imprisonment for a term which may  2[extend to two years, or with fine which 
may extend to five thousand rupees, or with both] and in the case of a continuing contravention with an 
additional fine which may extend to fifty rupees for every day during which such contravention continues 
after conviction for the first such contravention. 

26.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company,  every  person  who,  at  the  time  the  offence  was  committed,  was  in  charge  of,  and  was 
responsible to, the company for the conduct of the business of the company as well as the company shall 
be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment, if he proves that the offence was committed without his knowledge or that he exercised all 
due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other 
officer  of  the  company,  such  director,  manager,  secretary  or  other  officer  shall  also  be  deemed  to  be 
guilty of that offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm. 

27. Jurisdiction of court.—No court inferior to that of a Metropolitan Magistrate or a Magistrate of 

the first class shall try any offence punishable under this Act. 

28. Previous sanction of Central Government.—No prosecution for any offence punishable under 

this Act shall be instituted except with the previous sanction of the Central Government. 

1. Subs. by Act 57 of 1985, s. 11, for “or of any rules made thereunder” (w.e.f. 1-12-1985).  
2.  Subs. by  s.  11,  ibid.,  for  “extend to  six  months, or  with  fine  which  may  extend  to  one  thousand  rupees,  or  with  both” 

(w.e.f. 1-12-1985).  

11 

                                                           
29. Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall 
lie against the Central Government, or the Board or any committee appointed by it, or any member of the 
Board or such committee, or any officer or other employee of the Central Government or of the Board or 
any  agent  of  or  any  other person  authorised  by  the  Board, for  anything  which is  in  good  faith done  or 
intended to be done under this Act or the rules made thereunder. 

30. Suspension of operation of Act.—(1) If the Central Government is satisfied that circumstances 
have arisen rendering it necessary that certain of the restrictions imposed by this Act should cease to be 
imposed or if it considers it necessary or expedient so to do in the public interest, the Central Government 
may, by notification in the Official Gazette, suspend or relax to a specified extent, for such period as may 
be specified in the notification, the operation of all or any of the provisions of this Act, in all or any of the 
territories to which this Act extends. 

(2) Where the operation of any provision of this Act has, under sub-section (1), been suspended or 
relaxed, such suspension or relaxation may, at any time while this Act remains in force, be removed by 
the Central Government by notification in the Official Gazette. 

(3)  Every  notification  issued  under  this  section  shall  be  laid,  as  soon  as  may  be  after  it  is  issued, 
before  each  House  of  Parliament,  while  it  is  in  session,  for  a  total  period  of  thirty  days  which  may  be 
comprised in one session or in two or more successive sessions, and if, before the expiry of the session 
immediately following the session or the successive sessions aforesaid, both Houses agree in making any 
modification  in  the  notification  or  both  Houses  agree  that  the  notification  should  not  be  issued,  the 
notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; 
so, however, that any such modification or annulment shall be without prejudice to the previous operation 
of the notification. 

31. Application of other laws not barred.—The provisions of this Act shall be in addition to, and 

not in derogation of, the provisions of any other law for the time being in force. 

32.  Power  of  Central  Government  to  make  rules.—(1)  The  Central  Government  may,  by 

notification in the Official Gazette, make rules for carrying out the purposes of this Act. 

(2)  In  particular  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a) the powers and functions of the Vice-Chairman of the Board; 

(b) the term of office and other conditions of service of members, the manner of filling vacancies 

among, and the procedure to be followed in the discharge of their functions by, members; 

(c) the powers which may be exercised and the duties which shall be performed by the Executive 

Director and the Secretary; 

(d) the circumstances in which and the authority by which a member may be removed; 

(e) the holding of a minimum number of meetings of the Board every year; 

(f) the procedure to be followed at the meetings of the Board for the conduct of business and the 

number of members which shall form a quorum at a meeting; 

(g)  the  maintenance  by  the  Board  of  records  of  business  transacted  by  the  Board  and  the 

submission of copies thereof to the Central Government; 

1[(ga) the specifications with regard to grading work referred to in section 11B;] 

(h) the matters referred to in section 14; 
2[(hh) the manner of collection of fees under sub-section (2) of section 14A;] 

(i) the powers of the Board, its Chairman, the Executive Director and committees of the Board 

with respect to the incurring of expenditure; 

1. Ins. by Act 57 of 1985, s. 12 (w.e.f. 1-12-1985).  
2. Ins. by Act 36 of 1978, s. 6 (w.e.f. 30-8-1978).  

12 

                                                           
(j) the conditions subject to which the Board may incur expenditure outside India; 

1[(ja) the amounts for the purposes of the proviso to section 18A;] 

(k) the preparation of budget estimates of receipts and expenditure of the Board and the authority 

by which the estimates are to be sanctioned; 

(l) the form and manner in which the accounts should be maintained by the Board; 

(m) the deposit of the funds of the Board in banks and the investment of such funds; 

(n) the conditions to be observed by the Board in borrowing money; 

(o) the conditions subject to which, and the manner in which, contracts may be entered into by or 

on behalf of the Board; 

(p) the additional matters in respect of which the Board may undertake measures in the discharge 

of its functions; 

(q)  the  remuneration  and  other  allowances  payable  to  the  person  or  persons  referred  to  in      

clause (b) of sub-section (2) of section 9; 

(r) the  form  and  manner  of,  and  the  particulars to  be  contained in,  any  returns or  reports to be 

made to the Board under this Act; 

(s) the collection of any information or statistics in respect of tobacco or tobacco products; 

(t) any other matter which has to be, or may be, prescribed by, or provided for by rules under, this 

Act. 

(3) Every rule made under this section shall be laid, as soon as may be after it is made, before 
each  House  of  Parliament,  while  it  is  in  session,  for  a  total  period  of  thirty  days  which  may  be 
comprised  in  one  session  or  in  two  or  more  successive  sessions,  and  if,  before  the  expiry  of  the 
session immediately following the session or the successive sessions aforesaid, both Houses agree in 
making any modification in the rule, or both Houses agree that the rule should not be made, the rule 
shall  thereafter  have  effect  only  in  such  modified  form  or  be  of  no  effect,  as  the  case  may  be;  so, 
however,  that  any  such  modification  or  annulment  shall  be  without  prejudice  to  the  validity  of 
anything previously done under that rule. 

33. Power to make regulations.—(1) The Board may make regulations not inconsistent with this Act 

and the rules made thereunder for enabling it to discharge its functions under this Act. 

(2) Without prejudice to the generality of the foregoing power, such regulations may provide for all 

or any of the following matters, namely:— 

(a) the procedure to be followed at meetings of the committees appointed by the Board and the 

number of members which shall form a quorum at a meeting; 

(b) the delegation to the Chairman, members, Executive Director, Secretary or other officers of 

the Board, of any of the powers and duties of the Board under this Act; 

(c)  the  travelling  and  other  allowances  payable  to  persons  associated  under  sub-section  (8)  of 

section 4 or co-opted under sub-section (2) of section 7; 

(d) the pay and allowances and leave and other conditions of service of officers (other than those 

appointed by the Central Government) and other employees of the Board; 

(e) the maintenance of the accounts of the Board; 

(f) the maintenance of the registers and other records of the Board and its various committees; 

(g) the appointment by the Board of agents to discharge, on its behalf, any of its functions; 

1. Ins. by Act 57 of 1985, s. 12 (w.e.f. 1-12-1985).  

13 

                                                           
(h) the persons by whom, and the manner in which, payments, deposits and investments may be 

made on behalf of the Board. 

1[(i) the time within which full price for virginia tobacco shall be paid under clause (b), and the 

unfair practices for the purpose of clause (c), of section 13B.] 

(3)  No  regulation  made  by  the  Board  shall  have  effect  until  it  has  been  approved  by  the  Central 
Government  and  published  in  the  Official  Gazette,  and  the  Central  Government,  in  approving  a 
regulation, may make any change therein which appears to it to be necessary. 

(4) The Central Government may, by notification in the Official Gazette, cancel any regulation which 

it has approved and, thereupon, the regulation shall cease to have effect. 

1[(5) Every regulation made under this section shall be laid, as soon as may be after it is made, before 
each House of Parliament, while it is in session, for a total period of thirty days which may be comprised 
in one session or in two or more successive sessions, and if, before the expiry of the session immediately 
following the session or the successive sessions aforesaid, both Houses agree in making any modification 
in  the  regulation  or  both  Houses  agree  that  the  regulation  should  not  be  made,  the  regulation  shall 
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that regulation.] 

1. Ins. by Act 57 of 1985, s. 13 (w.e.f. 1-12-1985).  

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